Air fares in Hawaii in 3rd quarter bucked trend

Nationwide, air fares increased 7.5% in the same 2006 period

Associated Press

SAN FRANCISCO » Hawaii's interisland airline market had the biggest fare decreases in the nation in the third quarter of last year, the result of the fare war started by Mesa Air Group Inc.'s entry into the market, the U.S. Department of Transportation said yesterday.

Nationwide, airline ticket prices were up 7.5 percent in the third quarter of 2006 compared to the year before, the biggest increase for that period since 2000, the agency said.

The 7.5 percent increase was the average for all domestic flights and international flights starting in the U.S., on U.S. carriers.

The average domestic fare in the third quarter was $389.08, up 8.1 percent from the same period in 2005, but down 4.7 percent from the historic third-quarter high of $408.35 in 2000, according to the DOT.

By airport, the agency said the biggest year-to-year fare decrease it recorded was 16 percent, for Lihue. Airports in Kona, Kahului and Honolulu also recorded fare drops, from 7 percent to 12 percent.

The agency attributed the decrease to the fare war that developed between go!, launched in June 9, and Aloha Airlines and Hawaiian Holdings Inc.'s Hawaiian Airlines.

The largest price increase for major cities was in Cincinnati, where fares rose 25 percent. Other markets with increases greater than 17 percent in the third quarter of 2006: Charleston, S.C.; Manchester, N.H.; Providence, R.I.; and Greensboro/High Point, N.C.

The data was released the same day chief executives from Tempe, Ariz.-based US Airways Group Inc. and Atlanta-based Delta Air Lines Inc. faced questions from the Senate Commerce Committee on the effect on fares and number of flights should US Airways' hostile bid for Delta be successful.

In Washington, Gerald Grinstein, Delta's CEO, told legislators US Air's hostile bid of more than $8 billion would reduce competition and harm consumers.

US Airways CEO Doug Parker said the airline has lowered fares by as much as 83 percent in more than 1,100 markets since US Air's merger with America West.